Sweetmeats Inc., a deli, produces its own grains, such as corn, wheat, rice, and oats. The employees create different types of breads without having to buy the grains from other sources. This has helped them sell their bread items to customers at much lower prices than other neighboring delis. This scenario best illustrates a(n) .

The cost advantage is simply known as a type of an advantage that the firm has over competitors usually in terms of costs. The scenario above is called cost advantage.

Firms do reduce cost so that they can have a great advantage over competitors who have higher costs and so the prices of their products and services will then be higher.

There are a lot of factors to consider when reducing the cost of a firm. They include Distribution, technology, volume and scale of the company, raw material etc.

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Cost advantage.

Explanation:

In this scenario, Sweetmeats Inc., a deli, produces its own grains, such as corn, wheat, rice, and oats. The employees create different types of breads without having to buy the grains from other sources. This has helped them sell their bread items to customers at much lower prices than other neighboring delis. This scenario best illustrates a cost advantage.

Cost advantage can be defined as the factors, benefits or edge which an organization has to produce its goods and services at a cheaper rate and better quality, over its competitors or rivals in the same industry. Some of these factors include availability of raw materials, branding, skillful workforce, intellectual property, quality distribution channels, favorable location, great customer services, superior technology, etc.

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